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Online ISSN: 1099-176X    Print ISSN: 1091-4358
The Journal of Mental Health Policy and Economics
Volume 5, Issue 2, 2002. Pages: 71-78

Published Online: 11 Nov 2002

Copyright © 2002 ICMPE.


 

Trends in Mental Health Insurance Benefits and Out-of-Pocket Spending

David R. McKusick,1 Tami L. Mark,2* Edward C. King,3 Rosanna M. Coffey4 and James Genuardi3

1Ph.D., Senior Actuary, Actuarial Research Corporation, Washington, DC, USA
2Ph.D., M.B.A, Associate Director, The MEDSTAT Group, Washington, DC, USA
3M.A., Senior Analyst, Actuarial Research Corporation, Washington, DC, USA
4Ph.D.,Vice President, The MEDSTAT Group, Washington, DC, USA

*Correspondence to: Tami L. Mark, Ph.D., The MEDSTAT Group, 4301 Connecticut Avenue, NW Suite 330, Washington, DC 20008, USA
Tel.: + 1-202-719 7832
Fax: + 1-202-719 7801
E-mail: Tami.Mark@Medstat.com

Source of Funding: A contract from the Center for Substance Abuse Treatment (CSAT) and Center for Mental Health Services (CMHS) of the Substance Abuse and Mental Health Services Administration (SAMHSA) supported preparation of this paper (Contract No. 270-96-0007). The content is solely the responsibility of the authors and does not necessarily reflect the official views of SAMHSA or its components CSAT or CMHS, or the Department of Health and Human Services

Abstract
This paper examines trends in the generosity of private insurance benefits for mental health (MH) services in the United States from 1987 to 1996. The paper estimates the benefit-induced change in insurance payments for MH services that would have been made by typical health plans between 1987 and 1996 holding constant utilization of individuals at the 1987 level so that the changes in effective benefits could be isolated. Trends in mental health benefits were measured using two nationally representative household surveys of the U.S. civilian non-institutionalized population - the 1987 National Medical Expenditure Survey (NMES) and the 1996 Medical Expenditure Panel Survey (MEPS). Data on utilization and expenditures from the NMES/MEPS were used to simulate what the average person would have paid out-of-pocket under typical insurance plans in 1987 and in 1996. The study finds that limits on MH coverage, such as limits on reimbursed days of care, became more prevalent from 1987 to 1996, but that consumer cost-sharing rates declined. The simulations indicate that private insurance would have paid for a lower proportion of total spending in 1996 (60.1 percent) as compared to 1987 (65.8 percent). Despite the fact that limits on mental health services became more prevalent over the time-period evaluated, out-of-pocket expenditures did not increase as significantly because there was a corresponding increase in coinsurance covered by health plans.
 

Background: Insurance benefits can have a large effect on whether one is able to access health care services. Mental health and substance abuse (MHSA) insurance coverage has typically been less generous than that of general health services.

Aims of the Study: This paper examines trends in the generosity of private insurance benefits for mental health (MH) services in the United States from 1987 to 1996. The paper estimates the benefit-induced change in insurance payments for MH services that would have been made by typical health plans between 1987 and 1996 holding constant utilization of individuals at the 1987 level so that the changes in effective benefits could be isolated.

Methods: Trends in mental health benefits were measured using two nationally representative household surveys of the U.S. civilian non-institutionalized population, the 1987 National Medical Expenditure Survey (NMES) and the 1996 Medical Expenditure Panel Survey (MEPS). Data on utilization and expenditures from the NMES/MEPS were used to simulate what the average person would have paid out-of-pocket under typical insurance plans in 1987 and in 1996.

Results: The study finds that limits on MH coverage, such as limits on reimbursed days of care, became more prevalent from 1987 to 1996, but that consumer cost-sharing rates declined. The simulations indicate that private insurance would have paid for a lower proportion of total spending in 1996 (60.1 percent) as compared to 1987 (65.8 percent).

Discussion: Despite the fact that limits on mental health services became more prevalent over the time-period evaluated, out-of-pocket expenditures did not increase as significantly because there was a corresponding increase in coinsurance covered by health plans.

Implications for Health Care Provision and Use: Trends in plan design negatively affected those with high costs who are likely to surpass their limits and positively affected coverage for those with minimal use due to lower cost-sharing. These trends also indicate that persons in the most need, those with high utilization, particularly of inpatient care, experienced a decline in coverage while those with less intensive needs may have experienced a slight increase.

Implications for Health Policies: Out-of-pocket spending in both years of the study was substantial suggesting that improved health care coverage, such as that mandated in parity legislation, could improve access to care for persons needing mental health treatment.

Implication for Further Research: Additional research is needed to understand how trends in out-of-pocket spending and insurance benefits have influenced access to care.

 


Received 3 January 2002; accepted 7 August 2002

Copyright 2002 ICMPE